13 August 2007
Very often, artistes enter into contracts appointing a professional management company as their exclusive manager. When something goes wrong and a claim for breach of contract arises before the expiry of the contract term, the Court will not specifically perform such contracts as this type of contracts requires a substantial degree of mutual trust and confidence for its performance. Likewise, the Court will not grant injunctive relief which will have the same practical effect as an order for specific performance. In Hummingbird Music Limited v. Dino Acconci & Giulio Acconci (HCA 836/2007; 18 June 2007), the Hong Kong Court of First Instance reaffirmed these principles.
The Defendants are local pop singers who appointed the Plaintiff as their worldwide exclusive agent. This management agreement ("Agreement") runs until late 2010. In early 2007, the Defendants attempted to terminate the Agreement. The Plaintiff refused the request and commenced action to seek, inter alia, various permanent injunctions to restrain the Defendants from taking up engagements other than through the Plaintiff. The parties also applied for interlocutory injunctions against each other pending trial.
In hearing the applications for interlocutory injunctions, Cheung J of the Court of First Instance recited the established principles that the Court will not decree specific performance of contracts the performance of which involves a substantial degree of mutual trust and confidence between the parties. Injunctive relief to that effect, e.g. requiring the defendants to stick with the manager and perform the remaining term of the contract or else give up their career, will also not be granted (applying a recent Hong Kong case Worth Achieve Associates Ltd v Huang Sheng Yi (HCA 2058/2005 & HCA 2652/2006 consolidated; 6 February 2007)). On the facts, Cheung J considered that the Plaintiff had no realistic prospect of success in getting a permanent injunction at trial.
Cheung J then dealt with the question whether an interlocutory injunction pending trial should be granted against the Defendants when there is no realistic prospect of the Plaintiff getting a permanent injunction in the same or similar terms at trial. Whilst recognising the Court does have power to grant an interlocutory injunction regardless of whether a permanent injunction in the same or similar terms is to be sought at trial (section 21L(1) of the High Court Ordinance), Cheung J considered that there was no reason as a matter of law or common sense to grant such an interlocutory injunction in this case. In particular, the Court referred to the voluntary undertakings given by the Defendants to pay into court a part of their income from future engagements of their choice and to keep a proper account of their work and income pending trial. Accordingly, damages can be quantified and would provide an adequate remedy if the Plaintiff prevails at trial.
The Defendants crossed-applied for, inter alia, an interlocutory injunction restraining the Plaintiff from representing to third parties that it is still the Defendants' manager pending trial. The Court rejected this application after considering the balance of convenience. Cheung J however recognised that the Defendants' career would probably be seriously affected pending trial and therefore ordered a speedy trial.
This case reminds us that for contracts for personal service which require a substantial degree of mutual trust and confidence between the parties (commonly seen in artiste management contracts), specific performance of the contract, or injunctive relief to that effect, will not be ordered by the Court. What is usually left is the remedy of damages and, from the manager's standpoint, the interim remedies could be a court order on the other party to keep a proper account of income and to make a payment into court.
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